The Senate finally completed the first part of the budget (except for the Capital Reserve Fund) and it was sent to the House on Wednesday of last week. The House's Ways and Means staff is now pouring over the details to see exactly how the Senate amended the budget.
We anticipated the budget with a critique showing us the changes to be on our desk by June 4.
Then, both Senate and House will vote on a compromise and, if all agree, the budget goes to the Governor. The Governor has five days (not including Sunday) to review and veto any portion of the budget. After the budget returns to the House, it will reconvene and the Governor's vetoes will be debated, voted on individually, and either concur or override.
Because this process may take quite a while, a resolution has been read across the desks in both House and Senate to extend the length of the session if the need arises. Sine Die is required by law on June 6 unless the resolution is passed to extend the session. Sine Die means "meeting adjourned" and members are dismissed until the regular session begins in January 2014.
A bill that is gaining momentum is the Fair Tax Act (H. 3116). The SC Fair Tax Act eliminates state income taxes on household and businesses. Your take-home pay will increase immediately after the Act becomes effective as taxes are no longer withheld from your paycheck.
It only taxes new retail goods and services at the point of sale. It becomes a consumer tax, not a production tax, therefore people are only taxed on items they purchase not on products they manufacture. This will greatly draw businesses to South Carolina.
It simplifies our state tax code and eliminates the SC 1040 income tax form. It treats all taxpayers and businesses the same. We already have a flat state income tax. Anyone with a full-time job pays the top 7 percent rate.
The SC Fair Tax Act ends taxation on income for all households and businesses. It taxes consumption so there is no need to file a tax return. The "flat tax," which we have now, taxes income. The Act provides a 6 percent base sales tax, which brings in the same amount of money for the State Government as our current tax code.
The State Fair Tax Act includes a monthly pre-bate check which pays for sales expenses for groceries, medicine, etc. The pre-bate is a monthly payment which covers all sales tax expenses on retail spending up to the poverty level.
This means a lawful family of four would have to spend more than $2,400 per month on retail goods and services before they ever paid a penny in sales tax. The amount of the pre-bate is based on household size. The pre-bate completely un-taxes the poor and increases disposable income for the middle class.
The amazing thing about the SC Fair Tax is that it is not new. Every component has been successfully employed in one state or another, and on occasions some have been partially implemented nationally.
As always, thank you for the privilege of serving you in Columbia. If I can ever be of assistance to you, or if you have ideas on issues you want me to share with the rest of the General Assembly, please don’t hesitate to contact me at 553-9288 or at the State House (803) 734-2951 or email me at email@example.com,